Monzo-specific ‘Insights’ - Credit Worthiness

UK Feedback & Ideas
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I’m sure this must have been posed before, possibly in many different ways, but I can’t find anything specific within posts I can vote on. (Feel free to move/merge so I can add a +1 vote)

REQUEST: Monzo to improve ‘Credit Insights’ and include a Monzo-specific metric, with feedback, to assist customers improving their Monzo credit worthiness and responsible spending.

Monzo, in my opinion, offers incredibly useful tools and has some nice features that allow people to track their spending. Categories, Trending, Growth and so on. It’s not perfect, but it’s far better than traditional high street banks.

Monzo also offers a range of different products, and does give some insight as to acceptability/likelihood of success. For example, eligibility on amounts for a loan, or a credit limit on Flex, or the amount of an Overdraft.

However, it is not fully understood ‘WHY’. For example, I’ve been with Monzo for 10 years. I got a small loan from Monzo a couple of years ago and I paid this off very early. Did this increase my worthiness with Monzo?
I now have a Monzo Flex with a sizeable limit, an overdraft was offered with a sizeable limit (so much so that I reduced it to half of what was offered! Did this go in my favour, too?).
I have been offered a loan up to £30k. Is this because my successful repayment of the previous loan and the fact that I tend to repay my Flex early? Or that I don’t use my Overdraft?
Or is it simply from my overall credit file?
Or is it my job? Is it where I live?
Or is it because my credit utilisation is under 20% across all other credit?
Is it because I’ve held my account 10 years? What factor does that count for Monzo?

Interestingly, someone I am financially connected to who lives in the same area, can only get a Flex with a £250 limit (with a recent declined limit increase request), declined Overdraft, no loan availability. There has been no previous loan and no other credit facility from Monzo really. The account was opened earlier than mine 10 years ago.

Both credit scores (Equifax/Trans Union) are similar but not exact. Mine is slightly higher (scores aren’t actually a good metric in any case. There are many other metrics and decisions). The credit utilisation between accounts does have some disparity, with mine being far lower. But this is purely because I’ve opened previous cards, transferred the balance, and kept the others open for several years and not used them (they have all increased the credit limits over time, which helps too!). Interestingly, I do NOT link my other financial accounts to Monzo. The other account holder does (as do other friends in a similar position) where we have tried to work out where the differences are.

So, how do customers know what looks ideal for Monzo? How do customers know what their future looks like with Monzo? How can customers improve their worth so that their longevity and use of Monzo products is ‘in reach’? How can we manage our money better to improve our chances specifically with Monzo?

Monzo does have ‘Credit Insights’ that look a bit like this:

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I have to say, this is quite unremarkable and not really worthy of the space it’s taking up. I know this already. Nothing to see here. Further, the accounts I compare above both say this, and yet one is offered everything, the other not very much. So these ‘Insights’ do not really provide very much insight!

From my research, it is quite clear that Monzo do have its own criteria that sits outside of the usual credit checking. Clearly, financial institutions will have its own risk analysis and governance and own risk appetite. These are commercial decisions and likely adopted from their own research and actuarial assessments. There will no doubt be a base line with +/- for certain risk factors. Employed full time as an airline pilot? +5, employed 3 hours a week at a local shop -1, reside in the Cotswolds +2, reside in Jaywick (Clacton) -5. Got a mortgage? +5. Renting? +2 Live with parents? +0. And so on. Yes, this is profiling but it’s risk based and necessary (and happens in many other industries, including insurance, which is why one persons premium will be higher/lower than the next. Risk is pooled. This is understood. I’m not suggesting the actuarial figures are published, nor am I suggesting any commercial/risk appetite is exposed.

Understandably, introducing further insights would require some working out and considerations. Some of this will likely be commercially sensitive and some people may well choose to take offence. For example, you probably wouldn’t tell someone “we’re not offering you anymore credit because you live in an unsavoury area and experience tells us you’re a massive risk” (that said, this is exactly what insurance does tell people, but I guess relationship management in banking v insurance does differ!).

What I am saying is, quite clearly, the disparity between worthiness is demonstrable with persons of a perceived similar profile.

My suggestion would be something like:

  • “You’re doing well at paying back your £250 Flex, we just need to see 6 months usage before we consider an increase. Keep it up and we can likely increase this to £1,000”
  • “Looking to increase your Flex limit in the future? Using ‘Pay early’ and ‘Pay extra’ can help us see you’re managing well”
  • “We can see you’ve got 5 credit cards and using all of them over 50% of the limit. If you paid-off one of them by June, we could offer you a Monzo Flex with a £2,000 limit, or reduce all of them to 40% we could offer you £5,000”.
  • “You seem to have used very little credit so we can’t see how you’d manage. Utilising some of your credit will likely lead to Monzo offering you more products or higher limits”
  • “Looking for a loan to pay off that £6,000 credit card with NatWest you’re paying £300 a month towards? We could offer you this amount and this might reduce your interest and balance transfer fees” (less risk where Monzo can see the repayments made and earns Monzo money at the same time!)
  • “You’ve been employed by your current company for only 2 months. We can’t offer you any credit right now, but let’s revisit this around October. Good luck in the new job!”
  • “You don’t appear to have any savings or investment accounts with us. See
  • “We can see you’ve got a joint account. You could get an overdraft with us after we see 6 months of spending history on both of your main Monzo current accounts.”
  • “You aren’t using Monzo as a ‘main account’ nor are we seeing over £500 per month. Your credit eligibility with us could improve if you used your main or joint account for purchases and direct debits”

I’m not saying this is the exact/correct wording to use, just illustrative of what may be useful to know at least for me.

By all means have a caveat “This is not an assessment of your overall finances and does not provide any guarantee/is indicative only and each person assessed on an individual basis” blah blah.

Monzo does a lot of soft searching - fine, and works well with some eligibility - but it does love a ‘hard search’ when it already has access to the data and taking out/increasing multiple products. I appreciate this is typically when looking to take up a new product or increasing the credit line, but customers are often unaware of what is ‘optimum’, nor what they can actually do to improve their chances and limits.

Having enhanced insights could really help us understand what Monzo is looking for and set personal goals. In turn, Monzo would see an increase in card and account usage, increase app function usage, increase product take-up range, promote responsible lending and spending and be seen by customers to be transparent.

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Sounds a bit too much responsibility for Monzo to take on, and if things didn’t go the way of the consumer it leads to complaints and unnecessary costs and workload on top.

The premise is good, but then also leads to potential fraud pathways and consumer debt when in theory could result in irresponsible lending.

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Agree with Carl, one of the reasons these things are not widely broadcast is it allows someone to ‘game’ the system, make up a fake job, under-declare their expenses etc.

Experian do have something more advanced called Credit Expert but this does not tell you exactly what to do, only will point out the kind of things that banks look for e.g. ‘You are on the electoral register’ ‘You are using 30% of your available balance’ or in my case ‘You have opened 10 accounts in the past 6 months’

So they don’t explicitly tell you why, but the fact they mention it means it is a factor that certain lenders consider, remember every banks risk appetite is different, for example Monzo offered me a £1,500 flex limit, Santander gave me £15,000

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Hmm, interesting PoV. I guess I can see it to a degree. But nothing is definitive/guaranteed. Just an indication on the progress towards being at an optimal level or at least a more favourable position.

I know someone with a Monzo Flex account used fairly regularly but they have a very low limit. Otherwise great history across all financial products, always paying on time. Why? They’d absolutely love to Flex more and have found Flex to be brilliant way of managing money - paying it back early / extra payments, but it is limiting with only smaller amounts - particularly as the amount has to be over £100 for the interest free x3. Also, for larger purchases and the protections under the credit agreement. They just spent £879 on a family massive TV. Although preferable to use Monzo as their main accounting is done with them, they were forced to put it on a HSBC credit card and cleared it within 10 days. So both parties have missed an opportunity here.
They’re actually quite frustrated about it as they don’t like having too many financial accounts and like to have a ‘one shop does all’ (I did mention this is probably why Monzo haven’t given a higher limit - as their available credit/utilisation will look high. In reality, they have less credit balance than I do, so you could argue I’m higher risk due to how much I have available across other accounts…) but: who knows. That’s the point.

I considered this, but then also considered Monzo’s clever anti-fraud mechanisms. It goes without saying, someone fresh off the block, lived at 10 addresses in 12 months, opening an account then getting small credit/paying off and expecting £1000s isn’t what they’d look for in the first instance. Conversely, someone with 6-8 years at one or two addresses will clearly be more attractive. I guess this is why the CRAs give this as an indicator “you’ve been at your address for X years”, “the longest account you’ve held is 20 years” and so on.

If anything, it might make fraudsters stand out a little bit. I get fraud is a huge consideration and needs to be tackled (although not too much, else the U.K. economy would collapse [yes, I really did use say that lol]). Although there may be a risk of fraud with this suggestion, is this not mitigated by other measures? If we didn’t adopt features due to risk of fraud, I think we’d end up fairly stagnant.

Maybe even having this feature of enhanced Monzo Insights could feed into features under a Monzo Perk.

Now this I do see and had thought about. To the wrong consumer, yes it could drive abnormal behaviours to build that high credit, suffer a change in circumstance, use it all quickly and never to be seen again. But there would be red flags triggered. I’m not suggesting removing any red flags here. If anything, add more in.

I do get your point here though, particularly as it’s advertising credit limit increases. There’s likely regulatory red tape to consider too. That said, I get notifications all the time about credit increases. I’ve no idea why they give me more (hence the request), but it just goes up and up. I can stop it if I wanted to as there’s always that option given, as well as the manual option to increase. But I’m not going to press the ‘increase’ button (even to try it) because I don’t know whether I’m at that ‘optimal’ level yet.

Hmm, that’s highly detectable if Monzo is the main account that sees wages and employer detail. This could be one of the factors as to why a person isn’t at the ‘optimal’ level “Sorry, we can’t offer you more than £250 right now. You do not use Monzo as a main account” or been able to verify the proof of income. I said in another post (can’t find it now!) that I don’t use Open Banking and Monzo can’t see my main account to verify my salary. So, they must be very trusting to offer me the limits they have (I’d happily provide proof if they required it).
So, at the moment, I can only infer that Monzo don’t base decisions on verified income/outgoings. Maybe they do for newer accounts? Or accounts held less than X years? Who knows.

I’m not suggesting Monzo publish a list or even the risk scoring for job titles. Or even using that one at all on the suggested enhanced Insights.

Exactly! This is a great insight they offer! These types (and Clear Score etc) with the “you’re highly likely to be approved for this 0% card with XYZ bank” or “you’re guaranteed to be accepted for a card with XYZ (no limit explicitly given at this stage”.

Absolutely!

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I don’t disagree with the PoVs here, and I think it would definitely require some consideration to get the right balance.

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Just adding to this, as it looks like Monzo already do something similar:

Interestingly, this:

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So, if they can offer greater insights on ‘Flex build’, where the risk is arguably higher, then why not on their other products?

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It’s a target market for poor credit history.

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Yes, and those account holders have greater insights on what it takes to increase their credit limit and set goals by form of ‘streaks’. This is the sort of thing I was suggesting for things like Flex limits, overdrafts, joint overdrafts, loans etc.